If you are struggling to pay your bills, there are some simple clear debt solutions that might help. Whether it be a car loan, credit card bill, student loan or even a second mortgage; no one wants to be burdened with debt for a long period of time. The following suggestions offer some simple ways to clear debt.
Use a Savings Account
There are no quick solutions to clearing debt unless of course you come into a large sum of money that can be applied instantly to your bills. Most of us do not fall into that category. However, if you have a savings account or money market in a local bank or mutual fund, then you have ready access to some money. The money in these type of accounts are just not performing that well in the current economic situation, and offer a quick fix to some lower debt obligations. Using this money to pay off debt that carries a higher interest than what you are currently earning in your savings or money market account is a smart option.
Refinance
Refinancing your mortgage is another viable option to paying off larger amounts of debt. This option works well if your credit is in good shape and you are currently employed. The idea behind this strategy is to bundle your home mortgage with your credit card and other debt in order to eliminate years of extra interest payments and obtain an overall lower interest rate on the total amount.
Debt Stacking
Debt stacking is a good option for those who are not able to use either of the above mentioned ways. Debt stacking is simply a method of eliminating your debt in a faster manner by continuing to pay the same amount month after month even after a bill is paid off. The plan works like this. Let’s say you have several bills that you pay each month. You still owe $10,000 for your new car with a payment of $400 a month, and two credit card bills, one in the amount of $2,500 with a payment of $200 a month and another in the amount of $500 with a payment of $50 a month. Since the $500 bill will be paid off in about 11 months, you will have freed up $50 a month. You will now combine that $50 with the next lower amount, which in this case is the $200 bill. You will make a $250 payment the next month and continue until this bill is paid off. Once that one is gone you will take the savings of $250 a month and combine it with the $400 payment. Doing this consistently will not take any additional money out of your pocket, but will eliminate your debt much faster than spending the money saved and continuing to pay only the amount you were originally paying.
Hopefully these tips will have revealed some simple clear debt solutions that can help eliminate your debt and lead you on your way to debt freedom. By utilizing these strategies you will be saving yourself hundreds to thousands of dollars in extra interest payments and eliminating years of stress and worry.
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